Obama's Crony Capitalism
Barack Obama has his own stable of Enrons, companies benefiting from close ties to the president, seemingly able to leverage campaign donations, receiving taxpayer dollars to boost their prospects. They may be unviable on their own (as Solyndra was) or just get an added boost from us to help them against competitors whose investors and executives do not play the game.
The Washington Post have been superb in their coverage of Solyndra; a few months ago they tipped readers to yet another company apparently benefiting from donations to Obama's campaign. The company is publicly-held Polypore. They own another company called Celgrad that makes a key component of batteries used in the electric cars that Obama touts and spends our taxpayer dollars on developing and producing (for example, grants made to Fisker Automotive, a company that has Al Gore as a major investor).
The Washington Post's reporters Carol Leonnig, Joe Stephens, and Alice Crites reported back in June that Celagrd has benefited in unusual ways from government largesse:
Charlotte-based Celgard, for example, already was considered a global industry leader in manufacturing a battery component used in consumer electronics, including electric vehicles. It applied for stimulus funding to help build a new factory, and in August 2009, the Energy Department awarded it a $49 million stimulus grant. The company was one of 48 winners from among an estimated 240 applicants in the electric vehicle and battery sector.
Various government officials came to the plant and lauded its prospects. These included the head of the Department of Energy, the Labor secretary (to throw in the green jobs angle; in reality, green jobs are a euphemism for crony capitalism), and Barack Obama. President Obama lauded an unnamed company that fit Celgard to a tee in a State of the Union address.
Competitors were understandably not happy. The granting of government money to a profitable company was offensive. But what also set them off was that Polypore, Celgard's parent company, was being pursued by federal regulators. The Federal Trade Commission had charged Polypore with trying to monopolize several battery markets and control prices. Obama's visit came after an administrative judge had decided that Polypore was an illegal monopoly (the decision is being appealed).
Competitors complained that all this money and attention were giving Polypore massive advantage over rivals. The company did not need the money: its stock has risen more than tenfold since Obama took office and started promoting electronic vehicles. They could have tapped cheap equity capital or borrowed the money as other companies have done. Of course, if they issued stock to raise funds to build the factory, that would dilute existing shareholders by lowering the value of the stock they owned in Polypore.
So why did Obama's team give this company taxpayer money? Why help a monopolist? Aren't monopolies supposed to be evil?
Why not help create a level playing field and help rivals? Isn't fair competition the heart of capitalism, a dynamic that brings great products at a great price to consumers? Why not boost rivals against a monopolist?
Maybe those rivals were misallocating their money. Instead of investing their money in jobs and products, they should have invested in a certain Cook County politician.
The Washington Post again:
Private-equity firm Warburg Pincus has seen its original $300 million investment more than triple in value and recently has been locking in gains with stock sales. (More than $253,000 was raised for Obama in 2008 from Warburg employees and their families, campaign finance records show.)
The chairman of Polypore's board, Warburg Pincus director Michael Graff, and his wife donated $14,600 toward Obama's 2008 presidential bid, including $10,000 given shortly before the election to an Obama committee geared to get out the vote in battleground states. Graff, a registered Republican, made no donations to Republicans in the 2008 cycle, records show.
Doesn't Obama excoriate Wall Street on a somewhat regular basis -- especially when bad economic numbers are released and he needs a villain and punching bag to rile up Americans and distract attention from him and his policies? Why is he chumming up and helping Wall Street titans with taxpayer money?
Barack Obama learned a great deal about pay-to-play politics by spending his adult years in Cook County, where pay-to-play is the modus operandi of politicians. He seems to have learned his lesson well. He now has a history of running interference for donors and giving taxpayer dollars to donors. Undoubtedly, dogged investigators are on the trail of other Green Schemes and the people behind them. Will they reach the one guy who seems to the key player who parts with our money with delightful abandon?
Obama and his allies make a great deal about the potential of sunlight. To me, Justice Louis Brandeis had more sensible things to say about sunlight than our president. Brandeis said that "sunlight is the best disinfectant." We need a lot of sunlight in Washington.
The nation needs to see that Barack Obama is the King of Crony Capitalism.
Ed Lasky is news editor of American Thinker.